The Guardian has admitted that it used a quote from Israeli opposition leader Tzipi Livni on the Palestine Papers in a “misleading” way.

The newspaper’s corrections and clarifications editor said Ms Livni's comment on the documents, released by Al-Jazeera last month, “was cut in a way that may have given a misleading impression”.

In a report on January 24, Ms Livni was quoted as having said: “The Israel policy is to take more and more land day after day and that at the end of the day we'll say that it is impossible, we already have the land and cannot create the state."

In fact, what she actually said was that she understood the sentiments of the Palestinians when they saw the settlements being built.

She said: “The meaning from the Palestinian perspective is that Israel takes more land, that the Palestinian state will be impossible, the Israel policy is to take more and more land day after day and that at the end of the day we'll say that it is impossible, we already have the land and cannot create the state."

The Guardian has faced heavy criticism for its coverage of the Palestine Papers.

Advocacy group Bicom said the newspaper had made “consistent distortions”, which differed starkly from what was said in the documents.

Bicom said: “The Guardian has pursued an aggressive line in interpreting the documents, casting both Palestinian and Israeli negotiators in a negative light.”

The outgoing Israeli ambassador to Britain, Ron Prosor, also accused the Guardian of “out Hamasing-Hamas”.